Transportation Problem

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Lenka Macháčková
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1 Transportation Problem ١ C H A P T E R 7

2 Transportation Problem The transportation problem seeks to minimize the total shipping costs of transporting goods from m origins (each with a supply s i ) to n destinations (each with a demand d j ), when the unit shipping cost from an origin, i, to a destination, j, is c ij. The network representation for a transportation problem with two sources and three destinations is given on the next slide. ٢

3 Network Representation Network representation(without number) ٣ 1 d 1 s 1 1 c 11c12 12 c 13 c 21 c 22 2 d 2 s 2 2 c 23 3 d 3 SOURCES DESTINATIONS

4 Linear programming Formulation The LP formulation in terms of the amounts shipped from the origins to the destinations, x ij, can be written as: ٤ Min ΣΣc ij x ij s.t. Σx ij <s i Σx ij = d j x ij > 0 for each origin i for each destination j for all i and j

5 LP Formulation Special Cases The following special-case modifications to the linear programming formulation can be made: Minimum shipping guarantee from i to j: ٥ x ij >L ij Maximum route capacity from i to j: Unacceptable route: x ij <L ij Remove the corresponding decision variable.

6 Transportation Simplex Method The transportation simplex method requires that the sum of the supplies at the origins equal the sum of the demands at the destinations. If the total supply is greater than the total demand, a dummy destination is added with demand equal to the excess supply, and shipping costs from all origins are zero. (If total supply is less than total demand, a dummy origin is added.) When solving a transportation problem by its special purpose algorithm, unacceptable shipping routes are given a cost of +M (a large number). ٦

7 Example:Transportation Simplex Method ٧ Each cell represents a shipping route (which is an arc on the network and a decision variable in the LP formulation), and the unit shipping costs are given in an upper right hand box in the cell. S S Demand

8 Transportation Simplex Method Phase I - Minimum-Cost ٨ Step 1: Select the cell with the least cost. Assign to this cell the minimum of its remaining row supply or remaining column demand. Step 2: Decrease the row and column availabilities by this amount and remove from consideration all other cells in the row or column with zero availability/demand. (If both are simultaneously reduced to 0, assign an allocation of 0 to any other unoccupied cell in the row or column before deleting both.)

9 Transportation Simplex Method Phase II - Stepping Stone Method Step 1: For each unoccupied cell, calculate the reduced cost by the MODI method. Associate a number, u i, with each row and v j with each column. Step 1: Set u 1 = 0. Step 2: Calculate the remaining u i 's and v j 's by solving the relationship c ij = u i + v j for occupied cells. Step 3: For unoccupied cells reduced cost e = c ij -u i -v j. ٩ Select the unoccupied cell with the most negative reduced cost (e). (For maximization problems select the unoccupied cell with the largest reduced cost.) If none, Optimal solution.

10 Example Since total supply = 100 and total demand = 80, a dummy destination is created with demand of 20 and 0 unit costs. ١٠ Northwood Westwood Eastwood Dummy Supply Plant Plant Demand

11 Solution ١١ Using previous method we have: Making loop at the cell which has e=-10, as (P2D..P1D..P1west..P2WESt) Northwood Westwood Eastwood Dummy u i Plant Plant v j

12 Solution Since all the reduced costs are non-negative, this is the optimal tableau. ١٢ Northwood Westwood Eastwood Dummy u i Plant Plant v j

13 Solution ١٣ Optimal Solution From To Amount Cost Plant 1 Northwood Plant 1 Westwood 45 1,350 Plant 2 Northwood Plant 2 Eastwood Total Cost = $2,490

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